Jason J. Redd, a Director in the Gibbons Government & Regulatory Affairs Department attended an overflowing public hearing on February 14 convened by the Internal Revenue Service for the purpose of obtaining input from stakeholders concerning the initial proposed regulations for Opportunity Zones (OZ) issued in October. The IRS is reviewing comments on the first round of proposed rules and is expected to issue the next round of proposed regulations in March, with the potential for final regulations to be issued in late spring. Witnesses at the packed hearing included state cabinet officials, as well as representatives from state economic development groups, small businesses, community reinvestment coalitions, investment funds, and technology and planning organizations, among others. Testimony focused on ensuring that program regulations maximize investment and economic growth by generating new development, capital, and jobs in the distressed communities where OZs are located. There was also a clear call, by all in attendance, for clarity and flexibility in the next round of rules. Suggestions included: (i) modifying the rules to provide more flexibility to investors when exiting Qualified Opportunity Fund (QOF) investments, which is currently limited to a sale of the QOF investment itself; (ii) minimizing sourcing and location rules for OZ business income; and (iii) allowing QOFs to reinvest interim gains within a reasonable...
Tagged: Eminent Domain
NJ Appellate Division Announces Evidentiary Standards for Condemnations “Necessary” for a Redevelopment Project
At what point is a piece of property “necessary” for a redevelopment project? On January 7, 2019, the New Jersey Appellate Division published a decision in Borough of Glassboro v. Jack Grossman, Matthew Roche, and Dan Desilvio, — N.J. Super. — (App. Div. 2019) (slip op. at 2) that – for the first time – clarifies the phrase “necessary for the redevelopment project” as stated in the Local Redevelopment and Housing Law (LRHL) at N.J.S.A. 40A:12A-8(c). The three-judge panel addressed the question of whether a showing of necessity is required by a condemning authority beyond the designation of the area as one in need of redevelopment, and, what showing it must make in order to condemn a parcel of land located with a redevelopment area. Existing case law required the taking to be “reasonably necessary,” but had never clarified what standards should be used to evaluate how necessary a given property might be to a given redevelopment project. This decision now requires that when a landowner within a redevelopment area contests the necessity of a condemnation, the condemning authority must articulate a definitive need to acquire the parcel for an identified redevelopment project. In Grossman, the defendants owned or were purchasing a parcel located within a redevelopment area in the Borough of Glassboro. The area...
On March 22, 2017, we blogged about the importance of the United States Supreme Court’s looming decision in Murr v. Wisconsin – a regulatory takings case that was poised to resolve a key question long left unanswered by the Court’s takings jurisprudence: how do you define the relevant parcel in determining a regulation’s impact on “the parcel as a whole?” On June 23, 2017, the Court issued its ruling, and in a 5-3 decision answered definitively that it depends. Sometimes a regulation may go so far as to effect a “taking” of one’s property. In determining when a regulation has gone so far, the Court has previously instructed that reviewing courts must consider the regulation’s interference with property rights “in the parcel as a whole.” But the precise boundaries of “the parcel” are not always clear and, in many cases, may prove to be dispositive of whether there was a taking at all. The Court described the problem in Keystone Bituminous Coal Assn. v. DeBenedictis, explaining that because the regulatory takings analysis requires a comparison between the value taken from the property to the value which remains, “one of the critical questions is determining how to define the unit of property whose value is to furnish the denominator.” In Murr, the Court was presented with a number...
New Jersey Supreme Court Decides 62-64 Main Street, L.L.C. v. City of Hackensack, Clarifies Definition of “Blight” in Context of Redevelopment
On March 23, 2015, in 62-64 Main Street, L.L.C. v. City of Hackensack, the New Jersey Supreme Court determined that property does not need to have a negative effect on surrounding properties in order to be deemed “blighted.” Prior to the Court’s decision in this case, it was unclear whether a negative effect on surrounding properties was a prerequisite to a finding of blight, or simply one way to establish it. Because the New Jersey constitution allows municipalities to exercise their powers of eminent domain to redevelop blighted property, the Court’s decision could encourage more municipalities to move forward with the condemnation of property for private redevelopment.
In Dune Construction Dispute, N.J. Supreme Court Holds that “Just Compensation” in Partial-Takings Cases Must Be Reduced by Value of All Reasonably Calculable Benefits
When the Borough of Harvey Cedars took a portion of the beachfront property of Harvey and Phyllis Karan to allow the Army Corps of Engineers to construct a protective dune, the Karans lost their view of the ocean, and a court awarded them $375,000 as compensation for the drop in the value of their $1.7 million home. In a momentous decision with important ramifications for shore protection efforts and for a much broader category of eminent domain cases, the New Jersey Supreme Court held that “just compensation” for the Karans should also have reflected the quantifiable benefits that they received as a result of the improved flood protection provided by the dune.
A New Jersey Appellate Court ruled against several landowners in Long Branch who sought compensation for losses they allegedly suffered during the pendency of a condemnation action that the city eventually abandoned. In the absence of an actual “declaration of taking,” the Court held in its October 16 opinion, the landowners were not entitled to compensation.
Whose Interest is it Anyway?: How the Town of Kearny, N.J. Stumbled on the Condemnation of a Leasehold Interest
Last month, the New Jersey Supreme Court issued an opinion in Town of Kearny v. Discount City of Old Bridge, which refined and further complicated the process of condemning a leasehold interest. The decision also called into question condemnation provisions in existing leases. The atypical facts in the case likely led to the complex conclusion. The Town of Kearny designated an industrial area as an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law.
It Wasn’t Yours to Begin With: New Jersey Supreme Court Holds That City Need Not Compensate Beachfront Condemnee for Land Created by Beach Replenishment Project
As discussed in a recent post, beaches have a way of generating difficult cases about when land-use regulations result in a compensable “taking” of property. A new opinion from the New Jersey Supreme Court reminds us that things can be just as complicated when the government takes beachfront property the old-fashioned way, via eminent domain.
The Supreme Court of the United States recently declined to review a multi-plaintiff citizen challenge to the New Jersey Highlands Water Protection and Planning Act. The case, Shope v. State, which has been floating through the New Jersey court system since April 2007, finally met its end when the Supreme Court denied the petition for certiorari on June 28, 2010.